Microsoft is taking UK retailer and popular 'high-street' store Comet to the High Court in London for allegedly "creating and selling" more than 94,000 counterfeit recovery CDs of its Windows operating system.

In a press release issued this morning, Microsoft explained that it today issued proceedings against the retailer for selling the Windows Vista and Windows XP recovery disks to customers buying PCs with Windows installed.

The complaint identifies a factory in Hampshire, UK where Comet "produced and sold thousands of counterfeit Windows CDs to unsuspecting customers in the United Kingdom", adding that the company's actions were "unfair to customers".

Microsoft's associate general counsel, David Finn, said that its "customers deserved better".

Comet is owned by Kesa Electricals, a French company based in the UK. It is believed that the company is being sold to private equity firm OpCapita.

Many high street retailers sell Windows pre-installed on the computers and laptops they sell. Recovery CDs are often packaged along with the devices in case the operating system requires reinstalling.

Microsoft had stopped providing recovery CDs to some retailers, including Comet. As a cost saving measure, many PC manufacturers have stopped providing recovery CDs, and have turned to hard drive-based recovery options.

But Microsoft has been taking steps to reduce piracy in its latest versions of Windows, including copy-protection features. The next-generation operating system -- dubbed Windows 8 -- will include OEM BIOS activation allowing PC builders to pre-activate copies of Windows on the computers they sell.

Update 1: Comet did not deny the company produced the disks, but a statement said: "Comet has sought and received legal advice from leading counsel to support its view that the production of recovery discs did not infringe Microsoft’s intellectual property".

The company added: "Comet firmly believes that it acted in the very best interests of its customers. It believes its customers had been adversely affected by the decision to stop supplying recovery discs with each new Microsoft Operating System based computer".

Update 2: Microsoft retorts with a further statement from David Finn, adding a seemingly different perspective on things.

"In 2008 and 2009, Comet approached tens of thousands of customers who had bought PCs with the necessary recovery software already on the hard drive, and offered to sell them unnecessary recovery discs for £14.99 ($23)".

"Not only was the recovery software already provided on the hard drive by the computer manufacturer but, if the customer so desired, a recovery disc could also have been obtained by the customer from the PC manufacturer for free or a minimal amount".

Finn then added: "We’ve often encouraged our customers to buy from a trusted retailer. In this case, it is disappointing that a well-known retailer created so many unwitting victims of counterfeiting", further criticising the UK retailer.